No Land Grab

The first study, “A Decades Long Project: Atlantic Yards Financial Feasibility Study” was commissioned from Kahr Real Estate Services, a boutique real estate advisory firm whose diverse client base includes commercial and investment banks, private real estate investment firms, REITs, developers, and government organizations throughout the world. The study concludes that the project is simply not feasible within the 10-year projected development period. To condense the study’s conclusions:

• The current state of the capital markets will make it extremely difficult to obtain financing for a project of this size within the next 36 months.

• The projected residential market rate rental and condominium prices that the developer relied on when they originally underwrote the deal are substantially above the current market. They created their projection in 2006, a time that in retrospect is considered to be the top of the last real estate cycle.

• The demand for housing units is most likely not sufficient to support a project of this scale over the next ten years.

• The developer recently restructured its original agreement with the MTA to enable it to exit the purchase of the Phase II properties for a minimal or no breakup fee depending on timing. Based on the timing of the payments, we believe that this indicates that the developer is concerned about its ability to complete the project within the stated 10 year time frame.

Kahr Real Estate summarized the findings of the Feasibility Study by stating,

“It is extremely unlikely that the full project can be financed and completed within 10 years at a profit by a private sector developer without substantial subsidies in excess of what has already been currently proposed. Based on the state of the market, the current plan, and the collective experiences of other large scale projects, it is much more likely that the development will take at least 20 years to complete. Most important of all, the likelihood of this time frame has been essentially acknowledged by the developer... In addition, the timing of the payments [to the MTA] has now been stretched out to 2030 – the new timing of the payments clearly indicates that the developer expects the timeframe of the development to stretch beyond ten years.”

The second study, “The Atlantic Yards Plan and Why a New Environmental Review is Required”, is by Dr. Tom Angotti, Director of the Hunter College Center for Community Planning and Development. His analysis of the MGPP enumerates the incontrovertible reasons why NY State law requires the ESDC to produce a Supplemental Environmental Impact Statement.

Among the points made by Dr. Angotti are the following:

• Acres of parking lots may now be permanent, and an SEIS is required to analyze the impacts upon the sewer system of unmitigated storm water runoff from paved surfaces, and other possible results of that Worst Case Scenario.

• The inclusion in the MGPP of a site plan and design for the arena that the developer has since claimed is not representative of the actual plan and design, is inconsistent with the public’s requirement to comment upon the MGPP. There is, in effect, no site plan nor meaningful design for Phase I revealed in the MGPP.

• Given the amorphous timeframe, the MGPP proposes an essentially new plan with entirely new environmental and economic consequences that must, by definition of CEQRA/SEQRA, be analyzed in an SEIS or an entirely new EIS process.

• Environmental effects of new “interim” parking lots of indeterminate duration must be analyzed.

• Environmental changes of a significantly reduced rail yard, together with incremental purchases/closings on MTA and other land, and no guarantee of a platform being constructed prior to building Phase II, constitutes a new plan, requiring an SEIS.

• Mitigations proposed in the FEIS are rendered moot by the project time extension.

• MGPP violates CEQR/SEQR by failing to take into account all reasonable scenarios, including delays for whatever reason similar to the failure to accurately treat the No Build requirement in the FEIS.

Dr. Angotti said that his findings raise considerable doubt that the Atlantic Yards will ever be built and that it is now time for a “do-over”:

"The new timeline suggested in the MGPP makes many of the promised mitigations irrelevant and raises critical questions about what the project is, what the project will become, and what the effects will be on Brooklyn and all of New York City. Even if the developer released some shiny pictures, the underlying questions about this project suggest the ESDC should just go back to the drawing board. This Atlantic Yards can't be fixed."

Based on these evaluations, CBN also concluded a Supplemental Environmental Impact Statement is required;

“In light of the above, and in light of the continuing substantive shortfalls, inaccuracies, and insufficiencies identified repeatedly by our consultants, it is the considered opinion of the Council of Brooklyn Neighborhoods, Inc. that the proposed Modified General Project Plan for the Atlantic Yards Land Use Improvement and Civic Project, is inadequate as an assessment of both the benefits and adverse impacts of the proposed project. It cannot be used as a reliable guide for decision making.”